According to the Canadian Association of Petroleum Producers, reaching 5 million barrels a day will require a green light for Enbridge’s Northern Gateway Project and TransCanada’s Energy East line, a doubling of Kinder Morgan’s existing Trans Mountain Pipeline, as well as an expansion of the Alberta Clipper line – all in addition to Keystone. Even with those projects going ahead, the industry would still be shy about a million barrels a day of shipping capacity, a shortfall that CN, CP, and other railways would be expected to step in and cover.

Obama’s decision on Keystone, though, is up first. Contrary to the opinion of the U.S. State Department, approving Keystone XL is indeed a necessary condition to increasing oil sands production. What happens if it doesn’t get built? Canada’s oil patch doesn’t like to think about that scenario, but it’s one that investors need to be considering.

It also makes clear a situation that most Americans may not be aware of; we have so much gasoline, diesel and finished petroleum goods that we are exporting at rates that haven’t been seen since we were propping up our allies in the runup to World War II:

“Indeed, the US is so awash in oil that, even as Obama ponders his decision on Keystone, the American Petroleum Institute is working hard to remove restrictions on exporting crude that date back to 1975. The lobbying effort would only seem to bolster the credibility of claims by US environmentalists that the Canadian oil shipped through Keystone won’t be burned by American motorists but instead shipped abroad for another country’s benefit.”

And these columns are just the latest examples of a frustrating dynamic, making clear in the business (and opinion) pages north of the border, that the view on this pipeline is quite different than what is being told to anyone who will listen in the government and press on this side of the border. The message here, repeatedly, is that the Keystone XL pipeline is not essential to expansion of tar sands, won’t have significant climate impacts. We think that there is more than enough in the State Department’s research to fuel the President’s rejection of this project. But if he needs more, just read the paper in Canada…

Comments

I'm only guessing here, but I believe we won't stop climate change by limiting tar sands production to 2 or 3 million barrels per day. The only way tar sands production is going to get anywhere near the 2030 goal of 5.2 million barrels per day is with more in situ extraction. All the near surface mined tar sands we see pictured will have run out. In situ can potentially be a messy mess. Not as photogenic as strip mining, but not without reported problems.

Here's probably the report from the Canadian Association of Petroleum Producers Jeff Rubin is basing his number on:

"CAPP’s 2013 Crude Oil Forecast, Markets and Transportation report forecasts Canadian crude oil production will more than double to 6.7 million barrels per day by 2030 from 3.2 million barrels per day in 2012. This includes oil sands production of 5.2 million barrels per day by 2030, up from 1.8 million barrels per day in 2012."

A big chunk of that 2012 bitumen flows to Chicagoland and greater in flow upon completion of BP Whiting modification and the soon to be completed Flanagan South pipeline.

So when is Niala Boodhoo of WBEZ going to talk about Enbridge existing Illinois lines and Flanagan South? After, of course, a wonderful 20 something friendly discussion on Curious City about, "Hey, that one building there? Yeah, that one! What is it?"

Michael, as always, thanks for taking the time to read and comment. A couple thoughts:

* No, stopping KXL won't stop climate change. At this point, we've got a small window to take an array of actions. We need to deal with power plant emissions. And this is another action that the President can do with his own authority that would offset some carbon pollution, send a message to the world that we are serious about climate, and not just send a signal but actually slow the insane production targets in Alberta.

* I agree with you about the pipes in our backyards here in Chicago. But realistically, they are not going to be ripped out of the ground any time soon. We need to act now to stop the expansion that enables and emboldens the industry to go at those production numbers.

* When you are in a hole. Stop digging. New pipes are the tar sands shovel...

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